The Distinction between the Duty of Care and the Duties to Act Bona Fide in the Interests of the Company and for Proper Purposes

(2013) 31 Australian Business Law Review 337-353

Monash University Faculty of Law Legal Studies Research Paper No. 2013/34

Posted: 4 Dec 2013 Last revised: 9 Dec 2013

Date Written: November 28, 2013

Abstract

There has been contention recently as to the distinction between the equitable duty of care and the fiduciary duties to act bona fide in the interests of the company and for proper purposes. In particular, it is sometimes asserted that positive aspects of the latter duties are more appropriately part of the duty of care. This article demonstrates that the duties are in fact distinct. It provides a reasoned method of distinguishing the operation of each. This is particularly relevant given the differing remedial implications. It is also significant given that this was at issue in the long-running litigation involving the Bell group of companies, which will no longer be resolved by the High Court.

Keywords: Directors' duties, fiduciary duties

JEL Classification: K22

Suggested Citation

Langford, Rosemary Teele, The Distinction between the Duty of Care and the Duties to Act Bona Fide in the Interests of the Company and for Proper Purposes (November 28, 2013). (2013) 31 Australian Business Law Review 337-353, Monash University Faculty of Law Legal Studies Research Paper No. 2013/34, Available at SSRN: https://ssrn.com/abstract=2363373

Rosemary Teele Langford (Contact Author)

University of Melbourne - Law School ( email )

University Square
185 Pelham Street, Carlton
Victoria, Victoria 3010
Australia

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